Tentative Board Decisions
Tentative Board decisions are provided for those interested in following
the Board’s deliberations. All of the reported decisions are tentative and may
be changed at future Board meetings.
Thursday, May 18, 2017
FASB Board Meeting
Consolidation
targeted improvements to related party guidance for variable interest
entities. The Board discussed (1) comments from external reviewers on a
draft of the proposed Accounting Standards Update on Topic 810 on improvements
to related party guidance for variable interest entities (VIEs) and (2) any
remaining issues, including costs and benefits, and made the following
decisions.
Private Company Accounting Alternative
Determination of Whether Common Control Exists
The Board decided that the determination of whether common
control exists should be consistent with the amendments in Accounting Standards
Update No. 2014-07, Consolidation (Topic 810): Applying Variable Interest
Entities Guidance to Common Control Leasing
Arrangements.
Application of VIE Guidance for an Entity That
Can No Longer Apply the Private Company Accounting Alternative
The Board decided that a reporting entity should apply the VIE guidance on a
prospective basis if any of the conditions in the private company accounting
alternative cease to be met except in situations in which the reporting entity
becomes a public business entity. In those situations, the entity would apply
VIE guidance in accordance with Topic 250, Accounting Changes and Error
Corrections.
Effective Date and Transition Provisions
The Board decided that the effective date and transition
provisions for all the amendments in the proposed Update should be consistent
for all entities.
Decision-Making Fees and VIE Related Party
Guidance
Replacing Economic Interest with Variable
Interest
The Board decided that the term economic interest
should be replaced with variable interest throughout paragraph
810-10-55-37D of the proposed Update.
Cost and Benefit Analysis and
Comment Period
The Board decided that the benefits of the amendments
in the proposed Update justify the expected costs.
The Board decided
that the comment period deadline for the proposed Update should be the later of
75 days from the issuance of the proposed Update and September 29,
2017.
Next Steps
The Board directed the staff to draft a
proposed Accounting Standards Update for vote by written
ballot.